Fed Chair Nominee Kevin Warsh Emphasizes Central Bank Independence, Says Inflation Is a Choice

Gate News message, April 21 — Kevin Warsh, President Trump’s nominee for the next Federal Reserve chair, made significant remarks ahead of his Senate Banking Committee confirmation hearing on April 21. In testimony released on April 20, Warsh emphasized that the Fed’s monetary policy independence is largely in its own hands.

Warsh outlined three key points on Fed independence. First, Congress has mandated the Fed to ensure price stability, and inflation is a choice for which the Fed must take responsibility. Second, while the Fed has the highest degree of independence in monetary policy operations, this independence does not extend to all functions authorized by Congress, such as managing public funds and banking supervision. Third, the Fed must stay within its mandate; venturing into fiscal and social policy areas where it lacks authority or expertise poses the greatest risk to independence. Warsh stated the Fed should not serve as an all-purpose government agency.

Warsh also noted that elected officials, including the President, Congress members, and senators, can express views on interest rates without substantially threatening Fed independence. His background includes roles at Morgan Stanley and the Bush administration, serving as the youngest Fed governor from 2006 to 2011. Current Fed Chair Jerome Powell’s term ends May 15; if confirmed, Warsh would assume the position on schedule. The hearing also addresses Trump’s previous expectations for rate cuts and Warsh’s disclosed assets exceeding $100 million, though he declined to disclose specific investment holdings citing confidentiality agreements.